Buying interest emerged after crude oil plunged to as low as 69 in NY session Wednesday and the benchmark contract rose to settle +0.8% higher at 71.03. EIA's inventory report showed a mixed outlook on oil market in the US. While crude inventory dropped, gasoline stockpile recorded the biggest gain since January. RBOB gasoline price dropped -1.9% to close at 2.03. Natural gas price rose +3% to 4.25, Investors probably speculated higher temperatures in Texas, the Gulf Coast and Midwest later this week would improve gas consumption.

According to EIA, crude stock drew -3.84 mmb as low refinery runs offset small increase in imports. Cushing stock, while still 40% above last year's level, showed signs of stabilization. Gasoline inventory (+3.39 mmb) has somewhat turned down the bullish sentiment developed over the past few weeks. Although demand increased slightly to 9.35 mmb and refinery runs dropped, rise in imports due to finished gasoline production pushed the inventory level higher. Although the report showed that demand continued to increase, the 4-week average remained -0.3% lower than the same period last year. We believe rapid surge in retail gasoline prices had damped consumption. Distillate stockpile rose modestly as demand dropped and imports continued to increase.

Currently trading at 71, the black gold has changed little in Asian session. However, unrest in Iran and Nigeria should provide support to price. The anti-government demonstration after last week's presidential elections in Iran intensified as the disputed election has turned into violence and at least 15 people have been killed since last week. Iran, together with Iraq, Kuwait, Saudi Arabia and Venezuela, founded OPEC in 1960 and is the second largest oil producers in the organization. In May, Iran produced 3.72 mmb of crude oil, 13% of OPEC's total output and 14% of OPEC-11's. This also represented a +7.7% increase from April.

The Movement for the Emancipation of the Niger Delta (MEND) claimed that that have damaged a major pipeline at Royal Dutch Shell's Forcados terminal. Shell, the largest oil company in Europe, stated that oil shipment from Nigeria will be disrupted for a 5th month in July as a result. MEND is Nigeria's main armed militant group. Its supporters believed that their living environment has been ruined due to the pollution produced by multinational companies. Since 2006, the group's attacks have reduced Nigeria's oil export by over 20%. Nigeria, the 7th largest oil producer in OPEC, produced 1.74 mmb of crude oil in May, rose +19.5% from April.

Gold price rose +0.4% to 936 although an inflation report showed that CPI eased faster than expected in May. CPI fell -1.3% yoy in May, the biggest annualized decline since 1950, and core CPI moderated to +0.1% mom. Headline CPI rose +0.1% mom, compared with consensus of +0.3% and 0% in April. Weakness in USD against the euro, Australia, Canadian, etc, probably helped the yellow metal. Silver also surged +1.1% to 14.27. Platinum slid -1.3% to settle at 1205.2 after Robert Bosch, the world's largest automotive supplier, said that global vehicle output may drop by as much as 15-20% this year. Today, the precious metals trade with mild upside bias but near-term performance will continue to be determined by USD's movement.